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Chapter 17

Terms in this set (14)

Costing systems that are used for the costing of like or similar units of products in mass production are called ________.
process-costing systems
Which of the following companies is most likely to use process costing?
Red Paste Inc., a company manufacturing and selling toothpaste on a large scale
Process costing should be used to assign costs to products when ________.
the units produced are similar
Which of the following statements is true?
In a process-costing system, each unit uses approximately the same amount of resources.
Which of the following statements is true of conversion costs?
In process costing, they are usually considered to be added evenly throughout the production process.
An example of a business which would have no beginning or ending inventory but which could use process costing to compute unit costs would be a ________.
corporation whose sole business activity is processing the customer deposits of several banks
Which of the following statements best describes conversion costs?
Conversion costs are all manufacturing costs other than direct materials costs.
In a process-costing system average unit costs are calculated ________.
by dividing total costs in a given accounting period by total units produced in that period
The purpose of the equivalent-unit computation is to ________.
assist the business in determining the cost assigned to ending inventory and work-in-process inventory
When a Bakery transfers goods from the Mixing Department to the Baking Department, the accounting entry is ________.
Work in Process — Baking Department
Work in Process — Mixing Department
In a process-costing system, the calculation of equivalent units is used for calculating ________.
the dollar amount of the cost of goods sold for the accounting period
Which of the following statements is true of conversion costs??
Estimating the degree of completion is usually easier for direct material costs than for conversion costs.
The weighted-average process-costing method calculates the equivalent units by ________.
the equivalent units completed during the current period plus the equivalent units in ending inventory
Under the weighted-average method, the stage of completion of beginning work in process ________.
is irrelevant in determining the equivalent-unit calculation
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